Late Payment Penalty

Companies have one month from the date of the Notice of Assessment (NOA) to pay their tax.  

A company is required to pay the tax assessed as shown in the NOA before the payment due date even if it has filed an objection and is awaiting the outcome. If the assessment is subsequently revised, any excess payment would be refunded to the company.

If payment is not received before the due date, a 5% late payment penalty will be imposed on the unpaid tax.

Additional penalties of 1% per month may be imposed if the tax remains unpaid 60 days after the imposition of the 5% penalty. The 1% additional penalty will be imposed for each completed month that the tax remains unpaid, up to a maximum of 12% of the unpaid tax.

Late Payment Penalty Notice

Companies will be informed of the 5% penalty via a late payment penalty notice. Payment must be made before the due date stated on the notice to avoid further enforcement actions. 

GIRO Cancellation or Termination

If the deduction through GIRO is unsuccessful due to reasons such as insufficient funds in the bank account, or the deduction amount is higher than the limit set, etc., IRAS will cancel the GIRO plan.

A GIRO cancellation notice will be issued to inform companies that the GIRO plan has been cancelled. A late payment penalty will be imposed if the overdue tax is not paid immediately.

Further Enforcement Actions

If the tax continues to be unpaid, other actions to recover the taxes may include:  

  • Appointing agents like the company’s bank, tenant or lawyer to pay the moneys to IRAS; and/or

  • Taking legal action.

Companies will experience inconveniences in using their bank accounts should their bank be appointed as an agent to recover tax. In some instances, they may not be able to access their bank accounts until the full payment for tax has been received.

In addition to the recovery actions, IRAS may concurrently impose an additional 1% penalty on the overdue tax for each completed month that the tax remains unpaid, up to a maximum of 12% of the tax overdue.

Releasing Appointed Agents

Agents will be released automatically from the appointment after the tax and penalties have been paid in full.

Note:
For banks appointed as agents, requests for release cannot be processed on Saturdays, Sundays and Public Holidays. Any request for release of bank after 12pm on weekdays can only be processed on the next working day.

Checking Tax Balance and Making Payment

Please log in to myTax Portal and select "View Account Summary" to check the current balance. 

Please refer to Corporate Tax Payments for the various payment modes available.

Appeal for Late Payment Penalty Waiver

Appeals have to be made online via myTax Portal or using this Request for Penalty Waiver form. Alternatively, please scan the QR code below. The appeal will only be considered if the following conditions are met:

  1. You have paid the overdue tax in full, before the due date as stated in the late payment penalty notice; and
  2. a. No waiver has been granted in the past two calendar years; or
    b. You have paid on time for the past two years.

    Request for Penalty Waiver QR Code

Difficulty Paying Your Tax

If you need help with your tax payment, you may apply for a payment plan via the ‘Apply for Payment Plan’ e-Service at myTax Portal.

If your payment plan is approved, you must comply with the payment plan schedule. If you fail to do so, we will cancel the plan and take actions to recover the tax.

  • How is the 5% and 1% additional late payment penalty computed?

    Example 1: Calculation of 5% late payment penalty

    Company Y received a Notice of Assessment (NOA) dated 1 Jun 2020. The due date for the tax payable of $10,000 is 1 Jul 2020 (one month from the date of NOA). As Company Y did not pay the tax before 1 Jul 2020, a 5% penalty of $500 (i.e. 5% x $10,000) was imposed.

     Date of NOACorporate Income Tax Due Date Tax Payable 5% Penalty Imposed 
     1 Jun 20201 Jul 2020 $10,000 $500 

    Example 2: 1% additional penalty

    Company Z did not pay the tax payable of $10,000 before the due date on the NOA, and received a late payment penalty notice dated 2 Jul 2020 informing the company of the overdue tax and the 5% late penalty. The due date for payment of tax and penalty (i.e. $10,500) on the notice was 2 Aug 2020 (one month from the date of the late payment penalty notice).

    As the tax was unpaid one completed month after 60 days from the late payment penalty notice due date, a 1% additional penalty was imposed on 2 Oct 2020. 1% penalty will continue to be imposed for each additional month that the tax remained unpaid.

    The total penalty imposed was $700 (i.e. 5% penalty x $10,000 plus 1% additional penalty x $10,000 x 2 months).

    Company Z eventually paid the tax and penalties on 15 Nov 2020.

    Late Payment Penalty Notice Date Payment Date 5% Penalty Imposed Additional 1% Penalty Imposed 
    2 Jul 202015 Nov 2020

    $500

    ($10,000 x 5%)

    $200

    ($10,000 x 1% x 2 months)

  • I have appointed a tax agent. Who is responsible for my company’s tax matters?

    As the owner of the company, you are still responsible and liable for filing and payment issues, even if your agent fails to settle the filing and payment issues promptly.

  • Why is my company penalised for not paying the tax when I have objected to the tax?

    The tax is still payable pending the outcome of your objection to the tax assessed. If the assessment is subsequently amended, any excess tax paid will be refunded to the company.  

    Example: Penalties and Refunds when an Objection is Filed

    Company X received an estimated NOA, with a tax payable of $10,000, dated 23 Aug 2020. The due date for payment is 23 Sep 2020 (one month from the date of NOA).

    The company filed an objection and did not pay the tax. As no payment was received before the due date, a 5% late payment penalty of $500 was imposed.

    The company paid the tax and penalty on 12 Oct 2020. On 9 Nov 2020, the Assessment was amended to $1,300 and the late payment penalty was revised to $65 (5% penalty on $1,300) accordingly. A refund of $9,135 was made to the company.

    Date of NOA Due Date on NOATax Amount 5% Penalty Imposed
    23 Aug 202023 Sep 2020$10,000$500
    9 Nov 202023 Sep 2020($8,700)($435)
    Revised Tax and 5% Penalty $1,300$65